David White, CEO of TransCare Corporation, a private ambulance firm, told a gathering of EMS leaders at the 2011 Pinnacle Conference in Miami that unless public and private agencies learn to play together, there will be a battle that will make the ambulance wars of the 1980s “pale in comparison.”

“We need to figure it out or there will be external forces to figure it out for us,” he says.

Although the wave of recent consolidations—Rural Metro’s purchase by Warburg Pincus, LLC, the purchase of American Medical Response (AMR) Inc. by Clayton Dubilier & Rice, and the purchase of Care Ambulance Service and LifeStar by Falck, a global player that boasts it’s the largest private ambulance services provider in Europe—may seem like a repeat of consolidation of the industry in the early ‘90s, White makes some interesting distinctions.

In those days, White notes that there was too much money chasing one industry. “We made a lot of millionaires in those days,” he says. The net result was that no real value was created. Overall, patient care didn’t improve, nor did the industry as a whole, although there were a few advancements. For example, needed equipment upgrades often were made, safety measures improved and, in some ways, employee relations were advanced. “There were career opportunities that would not have existed had the consolidations not taken place,” he says.

On the flip side, unrealistic expectations that everyone would get rich quick led to short-sighted decisions. A widening wage gap developed between the field providers and those in upper management. Big corporations, thinking they knew better how to run EMS, forgot about the patient.

Even worse, disputes between agencies, including ugly turf wars, played out in public, undermining the trust of the citizens the agencies served.

As the CEO of TransCare, a regionally-based, private ambulance company operating in four states, White says he knows something about rebuilding public trust. From 2002 to 2007, TransCare hired and fired five CEOs and became embroiled in legal difficulties with the Federal government.

In 2008, White stepped in as CEO. His first task was to get the company back to basics. His leadership vision started with making TransCare a place where people wanted to work.

Today, he says, it is a profitable company, with a 15% growth rate over the last couple of years. Under White, the company has upgraded both facilities and equipment and significantly lowered employee turnover rates.

From his position, White sees significant differences in the new wave if EMS consolidation compared to the ‘80s and ‘90s. First, he says, everyone is expected to do more with less. Costs are skyrocketing, while Medicare and Medicaid reimbursements are falling. Public agencies, like fire departments, that seemed untouchable are being attacked.

At the same time, more money than ever is showing up in the industry as private equity firms recognize the potential for significant financial gains. These firms believe that healthcare reform and aging Baby Boomers will drive money into the ambulance industry. Although this is not the “big land grabs of 1992”, White does expect to see more companies being bought. “Don’t underestimate these guys. If we try to fight it, it will be ugly. If we embrace it, we could learn important lessons,” he warns.

Big cities are the target, he says, especially those under financial stress, which is most of them. “[Private equity firms] think there are gains in market share at the expense of the public [agencies],” he says.

White expects the consolidation to continue into 2012 with bigger deals, but fewer of them. “Buyers are more sophisticated,” he says. They are looking for smart people who run a good company that has a great relationship with their receiving hospitals.

He also says due diligence will be more rigorous. “They are going to be looking under every rock, guys. So be prepared for that.”

Since more than two-thirds of ambulance transports are non-emergent, “we have got to be the low-cost supplier to survive. They are trying to find reasons to pay us less, not more,” he says. “Currently, we are not viewed as solution providers.”

Innovation must be the new watchword. “Call and haul doesn’t work anymore,” he says, especially as reimbursement rates continue to decline. Companies must be able to define the value they provide. “You have a role in healthcare delivery, but you are going to have to really prove it,” he says.

One way in which White sees EMS agencies improving their value is to solve an increasingly thorny issue for hospitals—patient recidivism. “Is there a role we can play in that?” he asks.

He also suggests that agencies must look at improving efficiencies. “There are a lot of patients who use an ambulance who don’t need it,” he says. Agencies must also become more efficient about who shows up on every call.

White says that the entire EMS industry has got to play at a different level than ever before. “Things are going to have to change. We can be a part of that change,” he says. That means getting a seat at the table when decisions are being made about healthcare.

“There’s one think I know about capital—it’s got a very cold heart,” White says. “They’ll make it work one way or another.”